Net Promoter Score: Letting the Little Guys Grow

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Net Promoter Score: Letting the Little Guys Grow


Net Promoter Score: Letting the Little Guys Grow

How can an organization accurately track the number of loyal customers? There are a number of surveys designed to reveal such information while gathering responses from people who have used a particular service offered by the organization. However, the vague and often long-winded nature of surveys have proven to be a stumbling block instead of an effective analytical tool.

Loyalty is, perhaps, the one word that separates a successful business organization from an enterprise that is struggling. Net Promoter Score or NPS has emerged to be an efficient, reliable, and most importantly, an accurate analytical tool for measuring whether a customer is loyal to a particular service provider or not.

What is Net Promoter Score?

NPS was born out of the immense dissatisfaction from the traditional customer surveys that rarely provided an insight to customer behavior. It burst into the public sphere with Fred Reichheld’s influential Harvard Business Review article titled, One Number You Need to Grow.
According to Reichheld, a business needs to answer only two questions to measure the loyalty of its customers

  • 1) On a scale of 0-10 how likely are you to recommend our company/product/service to a friend or colleague?
  • 2) What is primary reason for your score?

A customer then gives a value ranging from 0 to 10. If a customer scores a 9 or 10, they are called Promoters: people who are likely to champion the cause of the service by not only buying it but also promoting it to others. If the score is low, from 0 to 6, the customer is a Detractor – someone who can spoil the growth of the service through negative word of mouth. Then there are those who score between 7 and 8. These are the Passives who sit on the fence regarding the product. The benefit of NPS goes beyond aggregating loyal customers. The tool can also be used to drive the growth of an organization. By drawing from the insights that it offers, a company can direct its sales, marketing, and development teams to offer better products and services to their customers.

NPS as a Metric for SMEs’

The effectiveness of NPS lies in the fact that it can answer whether a person would recommend a product or service to another person. And this is where the analytical tool demonstrates an important role for Small and Medium Enterprises (SMEs).

Big businesses can indulge in large marketing and advertising budgets. That is definitely not the case for an SME. Budgets in a smaller organization need to be strategically used. Costs must be kept low without sacrificing growth and customer experience. With the insights that an NPS score offers, the SME can find specific customer touch points which can be then targeted with key messages.

A smaller organization benefits immensely from the analytical tool which helps them in finding ‘Promoters’ who will recommend the service or product to others, thereby driving word-of-mouth publicity which is a key driver of growth. The SME can customize its offerings accordingly, to the people who are loyal and who will keep promoting the company free of cost.

NPS can also help a small organization outperform a larger company, because of its smaller chain of command and closeness to its customers which in fact helps the organization identify issues derived from the feedback and implements the necessary changes faster.

The analytical tool performs multiple functions, right from revealing customer behavior to strategizing actions for growth. With a single tool, the SME not only retains its existing customers but also acquires new ones within a tight budget.

NPS: Overhauling Customer Relationship

Customer experiences form a core aspect of a growth story, more so for SMEs. They need the customers to be happy and to keep buying their products and services. If a person does not have a good experience with what is being offered, they might not recommend the service to another person.

Because of its multipurpose abilities, NPS can facilitate an excellent customer experience for the SME through:

Relevant Feedback

The two questions on whether a person would recommend a company’s service and why is he willing to do so. Getting this information is the first, critical step. The SME can later utilize the analysis to target the specific areas that needs to be improved. For instance, a car rental company may find that their customers find their website not user-friendly enough. This issue can be addressed for an improved customer experience.

Providing The Key Touchpoints

There are certain ways in which a person interacts with a product or service. NPS enables the small company to get a clear blueprint of a customer’s journey from the information stage to the sales stage and to the post-sale service stage. The three stages offer multiple touch points where the company can enhance the experience of the customer. Once the small organization is aware of these strategic channels, they can direct their marketing efforts to improve their service and address any issues.

Suggesting Important Changes

Better customer experience can be provided by introducing small and gradual changes. However, these will only lead to incremental results. An SME may not have the luxury of time where small results can build into something bigger. The NPS can help implement solutions that will provide an instant boost to the customer experience. It could be improving the pre-sales staff, or converging multiple communication channels into a single stream. A big change often leads to a big impact on the customer experience.

Comprehensive Insight

NPS offers comprehensive insight into the two key aspects of customer experience – the performance of the product and its emotional connect with the person. This information allows the company to understand if there are specific areas where the product or service is not performing and work on them. For instance, if an online retailer is lagging behind in the delivery of its items, they can work on that aspect and improve the experience for the customers.


In short Net Promoter Score or NPS is a very useful tool that is used to measure the growth and stability of the business. Having said that not only large companies like Apple and Tesla use it but a lot of other small and medium sized organizations use it to track their level of customer satisfaction. It helps them to identify loyal customers which later are converted into Promoters of the business as loyal customers are not necessarily Promoters whereas promoters can be loyal customers. This phenomenon helps SMEs capture new markets and grow business.

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